Again, another multinational to ditch Nigeria, other African countries

British consumer goods group PZ Cussons Plc is at the warm-up stage of completely or partially quitting operations in Africa, where Nigeria and Kenya are the main manufacturing hubs.

The continent accounts for 28.7 per cent of the group’s revenue, with Nigeria being its largest and most diverse single market

We “have received a number of expressions of interest for our African business, recognising the potential of our brands and people, which could lead to a partial or full sale,” the parent company was quoted as saying in a Thursday statement by PZ Cussons Nigeria, its local subsidiary.

PZ Cussons Nigeria stated in the regulatory filing at the Nigerian Exchange it will make relevant information about the move public once a formal notification from its parent company is in place.

The 2024 financials of the Manchester-based group, released in London on Wednesday and seen by PREMIUM TIMES, showed net profit plunged 39.7 per cent after a 57 per cent slide in the naira against the sterling during the review period.

Dangote Refinery

It forced the maker of popular brands including Canoe, Premier Cool and Devon Kings to scale back dividend by as much as 44 per cent in a mark of the sweeping reverberations that naira devaluation are having beyond the local operations of multinationals doing business in Nigeria.

PZ Cussons holds a 73.3 per cent stake in its Nigerian unit.

“Our FY24 reported results fell short of our initial expectations, primarily due to the macroeconomic developments in Nigeria which, as we indicated last year, would significantly affect our results,” the group disclosed in its earnings report.

“The 70% currency devaluation over the course of the financial year has, therefore, caused a significant impact not only on our local business but also on the profitability and financial position of the Group.”

The Nigerian division reported its first annual loss (N76 billion) in years in August, following a surge of 3,000 per cent in foreign exchange loss

PZ Cussons Nigeria’s share price is down by 40.8 per cent this year, and trails the NGX Consumer Goods Index, the stock index tracking the performance of the consumer goods sector, which has yielded 40.3 per cent so far.

PZ Cussons’ deal to buy out the minority shareholders of its Nigerian division and take the company private earlier this year collapsed after the capital market regulator refrained from approving the bid.

The Securities and Exchange Commission said what PZ Cussons offered to acquire the minority shares was lower than the market price of the shares at the time.

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